IPO Note : Uniparts India Ltd By Nirmal Bang
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Uniparts is a global manufacturer of engineered systems and components for the off-highway market in the agriculture, construction, forestry, mining (CFM) and aftermarket with presence across over 25 countries. Its core product portfolio includes (i) 3-point linkage systems (3PL) and (ii) precision machined parts (PMP).
Objects and Details of the Issue:
The public issue consists of Offer for sale of 1.45 cr Equity Shares aggregating upto ? 836 Cr
The company will not receive any proceeds from the Offer and all such proceeds will go to the Selling Shareholders.
Investment Rationale:
* Global 3-point linkages (3PL) market is expected to grow at 7% over 2021-26
* Global Precision Machine Part (PMP) market is expected to grow at 7% over 2021-26
* Engineering driven, vertically integrated precision solutions provider
* Global business model optimizing cost-competitiveness and customer supply chain risks
* Long-term relationships with key global customers, including major OEMs, resulting in a well-diversified revenue base
* Focus on higher value addition products and enhanced service offerings to improve the margin profile
* Strategically located manufacturing and warehousing facilities that offer scale and flexibility
Valuation and Recommendation:-
Uniparts has demonstrated its scalability and execution with the topline growth at 12% CAGR over FY17-22 and has scaled revenue of Rs. 1227 Cr in FY22. The company has reduced their debt from Rs. 330 cr in FY19 to Rs. 83 cr as of June 2022, which has helped Uniparts to improve its bottom line performance. A global player of engineered systems and components for the off-highway market in the agriculture, CFM and aftermarket, is anticipated to increase its market share from present 8% in higher than 70 HP segment. We believe Uniparts is being offered at reasonable valuations at 15.6x FY22 earnings considering peer valuations and future growth opportunities in the 3-PL and PMP industry. We recommend subscribing to the issue.
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SEBI Registration number is INH000001766
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